tv The Profit CNBC November 5, 2019 1:00am-2:00am EST
man: nice work, by the way. man #2: fantastic. man: sounds great. lemonis: and to see what they've gone through and how they've learned and how they've stubbed their toe and picked themselves back up, their personal growth is really what makes small business so fascinating. the sky's the limit. ♪ i'm gonna just tell you, that cornbread is legit. at a packaged-food business, known for its flavorful mixes... erica: we have flavors like berry cobbler, bourbon salted pecan. lemonis: ...the owner has bitten off more than she can chew. andre: if you're not capable of running the business and making it successful -- erica: who says i'm not capable of running the business? lemonis: she spent way too much money. andre: she's been running the business for five years, and the profitability is close to zero. lemonis: now, colossal debts have clogged her cash flow. how much debt do you have? erica: it's probably about half a million. andre: shoot. half a million dollars. lemonis: ...bringing her business and her family to the brink. erica: why should i share information with him if he doesn't share information with me? lemonis: ask him.
if i can't get her to understand that she cannot do it all on her own... erica: i just love cooking on my own, without people telling me how to do it, and what to do. lemonis: ...southern culture will be cooked. honestly, that's [bleep] up. my name is marcus lemonis, and i risk my own money to save struggling businesses. we're not gonna wake up every morning, wondering if we have a job. we're gonna wake up every morning, wondering how many jobs we have to do. it's not always pretty. everything's gonna change. everything. but i do it to save jobs, and i do it to make money. this... -let's go to work. -...is "the profit." ♪ erica: hey, leyton, it's erica over at southern culture. how are you? lemonis: in 2012, erica barrett launched southern culture artisan foods, a line of all-natural packaged food mixes, based in atlanta, georgia. erica: you and quinn are gonna be working on grits.
original grits, and then we need some truffle and sea salt, as well. lemonis: it had started as a side business, but as word of mouth spread, and the product offering expanded, from pancake and waffle mixes to bacon rub and grits... erica: write down what you guys produced. that way, i can put it into inventory. woman: yes, ma'am. lemonis: ...she gave up her full-time career to focus on this business. erica: i will wait to hear back from you on walmart meetings. lemonis: soon it was attracting high-profile admirers. erica: the packaging company that does pre-printed? man: right. erica: this guy's been calling me all week. man: okay. erica: 'cause he knows that we have a possibility of that walmart deal. lemonis: ...and sales approached a half a million dollars a year. erica: [ laughs ] you get the meeting, i'll make it happen. lemonis: but now the company's in trouble. sales have slowed, and debt has mounted. nichelle: this is the quote from tlc rents, the updated one. erica: $3,249?! sweet jesus! man: we didn't get any samples from your company, for some reason. erica: oh, my god. okay.
it's just a mess. i mean, it really, really is a mess. lemonis: the packaged-mix business is a multi-billion-dollar industry and growing. so, i came to atlanta to check it out. hello. nichelle: hi. lemonis: how are you? i'm marcus. nichelle: hi, marcus. how are you? lemonis: i'm good. i came to find out what the story is. is erica here? nichelle: erica's here. lemonis: awesome. can i meet her? nichelle: absolutely. come on. lemonis: great. nichelle: this is erica. erica: marcus! lemonis: how are you? erica: good. how are you? lemonis: nice to meet you. erica: i'm erica. lemonis: nice to meet you. erica: nice to meet you, as well. oh, man. welcome to southern comfort. lemonis: this is it. erica: do you want to take a tour now? lemonis: i want a tour. i want to know what happens. erica: okay. so, this is the warehouse. it's about 3,000 square feet back here. lemonis: this seems nice. erica: yeah. so, i've been cooking since i was 9 years old. and making breakfast for my husband one saturday morning, i wanted to make these pancakes. so, i went to the store, and i go get all of these great ingredients.
my bill was close to $30. and i'm thinking, "for freakin' pancakes?" why isn't there anything, like, innovative on the shelf that already has the strawberries, already has great blueberries, already has sprinkles, or whatever it is that i want to put in my pancakes so i don't have to buy a bag of strawberries and they go to waste. so, i left the grocery store with this idea and just kind of ran with it. lemonis: wow. that's a lot of products. erica: yes. the first one is our pancake and waffle mix. lemonis: okay. erica: so, we have flavors like berry cobbler, bourbon, salted pecan, vanilla, sweet potato, gingerbread. lemonis: i've never had pre-made flavored pancakes. erica: yeah. lemonis: is this expense? erica: it sells for about $4.49. lemonis: so, how much is a box of bisquick? erica: $1.99 lemonis: and how many of these does it take to make a box of bisquick? erica: about three boxes. yeah, ours is more premium. you know, we have freeze-dried fruit. it's expense to buy that. lemonis: okay. what's next? erica: we have a product called bacon rub. it is a seasoning blend for bacon, and fried chicken mix. we have spicy and original. lemonis: okay. erica: and probably one that i'm most proud of -- grits. lemonis: okay. erica: there's three
flavors of that. lemonis: and who came up with the recipes? erica: i did. lemonis: all of them? erica: yes. lemonis: so, you came up with the idea? erica: yep. lemonis: the packaging? erica: yep. lemonis: the recipes? erica: yep. lemonis: the flavors? erica: yep. lemonis: the process? erica: yeah. lemonis: what did you not come up with? erica: i came up with everything. lemonis: okay. erica: and this is my mom. lemonis: how are you? mom: how are you doing? lemonis: nice to meet you. what is your name? lamarinette: lamarinette. lemonis: what is your role here, like, in the business? lamarinette: i do mail orders. lemonis: mail order. lamarinette: i'm a receptionist. i drop off delivery. erica: complain. lamarinette: what else -- she says i complain. lemonis: okay. we got to find a table to sit them down at. why don't all three of us do it? and i want to line up all the flavors in each row, okay? all right, so... wait a minute. wait a minute. this is too much. erica: oh, we're missing one more skew. sorry. lemonis: okay. i mean, there's so many, you can't even keep track of them. so, 3 sets of grits, 17 types of waffle and pancake mix...
erica: yep. lemonis: ...3 types of bacon rub, 2 types of chicken mix, and one type of syrup. erica: yep. lemonis: there doesn't seem to be as much thought as there could be in terms of streamlining and organizing their lineup -- whether it's fried chicken with two, which maybe you don't have enough, or pancakes with 17, which maybe you have too much. i kind of scratch my head and wonder, "are they a southern-company? are they a breakfast company?" i don't really know what it is. how much revenue did you do last year? erica: about half a million dollars. lemonis: half a... really? erica: yeah. we sell to williams sonoma, kroger, a lot of specialty stores, as well, across the u.s. lemonis: wow! of the $500,000 you did last year, walk me through where the revenue came from most to least. erica: pancakes -- about 75%. lemonis: and how many of them make up the bulk of the revenue? about six flavors. lemonis: okay. erica: then our fried chicken mix. lemonis: how much was that in revenue? erica: 20%. lemonis: okay. so, you understand so far we're at 95%?
erica: yeah. lemonis: okay. pancakes and fried chicken make up 95% of her revenue, and i think the way she developed the other products and the way she connected them together is probably why they didn't take off. why did you choose to package them differently if you were creating a brand? erica: because i wanted to be able to distinguish the grits from the pancakes and the bacon rub. lemonis: and you did a good job with that. erica: thank you. lemonis: they're all different. erica: thank you. lemonis: which is probably why the other ones don't do well. can i taste the product? erica: yeah, i can make it. lemonis: i'm gonna make it with you. erica: all right. absolutely. grab the fried chicken mix. lemonis: and then what about the pancakes? erica: sweet potato. lemonis: okay. we'll take this one. erica: hey, andre! andre: hey, how you doing? lemonis: how are you? erica: that's my husband, andre, marcus. lemonis: i'm marcus. andre: hey, marcus. lemonis: nice to meet you. andre: nice to meet you. lemonis: you here to help us? andre: yeah, sure. every once in awhile, i come and help out. erica: he's been here, like, three times. ♪
andre: she's been running the business for five years, and the profitability is close to zero. it's not ran efficiently. and the margins are slim. lemonis: are they? andre: yeah. lemonis: what are they? andre: i don't know what they are, but i know -- lemonis: so, then how can you say that they're slim? andre: well, i mean, i know that she always needs some money. lemonis: so, is that the margins that are wrong? andre: i think it's the mar-- i think she also miscalculates. i used to do this full time, so i know for a fact that -- erica: andre, you never get -- lamarinette: how many years ago? erica: part time. andre: no, i did it almost full time 'cause i worked -- lemonis: so, your calculations are off, too. lamarinette: almost full time. erica: your calculations are off! ♪ lemonis: to be honest with you... it's delicious. [ laughter ] i have a little knowledge on fried chicken, and this was crispy. it had heat, but it was smooth and flavorful. erica: it is delicious. lemonis: i could say without a doubt that i would be comfortable
putting my name on this product. i eat fried chicken almost everywhere i go, and this is the best fried chicken i've ever had. it's fluffy. i can taste the flavor as opposed to just smell the flavor, which is a big difference. lamarinette: yes. erica: yeah. lemonis: i really like it a lot. erica: thank you. thank you. that is awesome. lemonis: so, the ingredients. erica: mm-hmm. lemonis: organic flour, sweet potato, organic sugar. erica: it's all-natural ingredients. lemonis: i would pay $5 for this. erica: okay. lemonis: like, a family of four could eat that. erica: yeah. lemonis: what does this packaging cost? erica: about 74 cents. lemonis: really? erica: yeah. lemonis: okay, that's expensive. erica: it is expensive. lemonis: very expensive. what does this bag cost? erica: 2 cents. lemonis: okay, so now we're at 76 cents. what do the ingredients cost? erica: 44 cents. lemonis: so, we're just over $1.15? erica: yep. andre: but once you've calculated the labor cost, it's a lot higher. lemonis: so, what does -- how much labor goes into making this, andre? andre: i mean, i don't have the exact numbers, but the employees aren't as efficient.
i mean, like, when i come in here, i always get upset because i see them walking around. lamarinette: but how do you know when you're not here? andre: that's pretty much what i see. you come in here, you get on your laptop, you take conference calls, and then you leave. andre: no. lamarinette: andre. andre: yes? lamarinette: let's be honest. erica: you're not here with us. lemonis: you know when you're gonna buy something big and this guy comes in, and he's like, "the closer," the one that reinforces everything that's happened? andre would be, like, the opposite of the closer. he's the guy basically saying, "no, you think this is a great idea, but let me just tell you, this is a really bad idea, and the business is really screwed up." look, it's clear to me that you have a particular perspective on the situation. andre: mm-hmm. lemonis: let's you and i go talk about it ourselves. andre: okay. lemonis: okay. so, why does everybody feel like you walked out? andre: well, i mean, i kind of did walk out, but i walked out because when you have a company, it's so much to do. it's, like, you're never done, and i also worked full time
at the time when i was doing that. lemonis: so, you have a real career that you enjoy? andre: yeah, yeah. this was more for erica. like, initially, i was doing -- i was starting to do most of the sales, and i was up every single night -- night and day -- like, trying to get more customers. lemonis: did you give up? andre: i did kind of give up. i gave up because we weren't seeing eye to eye. like, i'm a different thinker. so, like, i always think about the future, and, like, erica, she's never really been into saving. and i want to see profitability, and if i'm not seeing profitability, then i'm gonna lose interest. erica: i mean, let's be honest. i feel like i've always supported his dreams. i just want the same type of support and respect. i almost feel like i'm on an island, me and my mom, and we're going through this alone. andre: if you're not capable of running a business and making it successful, then what's the point of -- erica: who says i'm not capable of running a business? lemonis: i don't even know when the last time you guys actually talked about this 'cause this stuff seems very fresh to me. andre: i feel like our relationship is not as good as it used to be.
erica: i don't feel like he fully understands me and my dream and how much it means to me. and i feel like when you marry a person, you're supposed to share a dream, not be divided. even if it's just encouraging words like, "hey, it's gonna be okay. i'll help you work through it." it's just like, "you chose that. why don't you just shut it down?" lemonis: i don't necessarily disagree with what andre is saying. what i disagree with is his delivery. if you want to make a point to somebody, you have to do it in a way that helps them be open-minded to the idea. erica: i mean, he knows sometimes when i need money for payroll, and he's helped me out. he does have a heart. he's like, "okay, i'll give it to you." lemonis: it sounds to me like when push came to shove, he was there for you. erica: absolutely. i love him a lot. lemonis: you have a beautiful marriage. you cannot let the business come in between it no matter what. what i'd like to do actually is meet at the table, and i want to go over the financials. erica: okay. lemonis: okay? andre: all right. thanks. ♪
lemonis: have you ever seen these financials, andre? andre: no. lemonis: not once? andre: no. lemonis: 2015 shows the total sales of $616,000. net income of $77,000. and in 2016, $500,000 in revenue, and it about broke even. so, here's the the summary of the financials -- over the course of five years, it basically broke even. loss a couple years, made a couple years. so, let's go through your liabilities. on deck -- $25,000. erica: that is a loan. it's an alternative lending company. lemonis: what's the interest rate on that? erica: it's at around 40%. andre: 40% on a loan? that's, like -- that makes no sense. lemonis: why did you take a 40%-interest-rate loan? erica: i wanted to fund fourth quarter orders. couldn't get the money from anywhere else. lemonis: did you ask andre? erica: yeah. lemonis: and what did he say? erica: "no." lemonis: bolsters -- $75,000. what is that? erica: another alternative loan. lemonis: where's the money? erica: inventory, paying people,
working capital. lemonis: that means it's gone. erica: well, i believe that a lot of it is the interest that we paid on the alternative loans. lemonis: how much debt do you have? erica: it's probably about half a million. andre: shoot, half a million dollars? never heard that number before. i mean, that's basically owing on a $500,000 house. lemonis: was that a secret? erica: yeah. this is not a secret, though! we don't talk about this stuff! andre: i've asked her before, and she's never told me. erica: i'm not a liar! i'm not withholding information! he doesn't share anything! why should i share with him if he doesn't share with me? andre: we used to share. erica: why should i share information with him if he doesn't share information with me? lemonis: ask him. erica: it's pointless. lemonis: andre, you've been very critical of the business. andre: yeah, but it's almost as punishment for wasted money. lemonis: the solution isn't to keep telling her how stupid she is. andre: i mean, i would say as
a repercussion for -- lemonis: what a repercussion! she's not your child! honestly, that's [bleep] up. erica: i'm not a liar! i'm not withholding information! we'd love some help with laundry. spray and scrub anything with a stain. wash the really dirty clothes separately. tide pods with upgraded 4-in-1 technology unleash a foolproof clean in one step. aww, you did the laundry! it's got to be tide. for all of the heroes who serve us, t-mobile is offering 50% off family lines for military, veterans and first responders.
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lemonis: andre, why do you think i want to invest in erica? what talent do you think erica brings to the table that makes her investment worthy? andre: i think she can make -- i mean, welemonis: did you hearss intowhat he just said?ness. what'd he say? erica: "we." lemonis: andre, your wife, who you love, who you're frustrated with right now, she needs your support. can you two shake on that -- that you're willing to do that? andre: yep. [ both laugh ] lemonis: the reason i want to take a shot on you, erica, is because a couple of the products you've created have real appeal, and the fact that you generated $500,000 in sales is a big deal to me. the problem here is that this business looks like it's dead on arrival because of this debt mess, but perceivables are an asset. erica: yeah. lemonis: equipment is an asset. inventory is an asset. erica: yeah. lemonis: and these are things that you can use to pay everybody off. so, the offer that i'm willing to make
is very different this moment. i'm willing to invest $75,000 to find co-packers, get new packaging put together, and bring products to market if you can prove to me that you could have financial discipline and that the inventory, the assets, all get sold off every debt gets paid down, paid off, or a payment plan is put into place. normally, when i go into these deals, i'm ready to invest in a business right at check-in, get equity in exchange for it, but in this particular scenario, i really feel like erica needs to prove to me that she could learn what financial responsibility is. and until she proves that to me, there's no point in talking about equity. so, that is my offer, but i need to know if we have a deal. erica: marcus... you have a deal. lemonis: a check cannot be cashed until both of us agree that these things have been done.
erica: okay. lemonis: okay? erica: i'm up for the challenge. lemonis: okay. we have a deal? erica: we have a deal. absolutely. lemonis: do we have deal? andre: yep. definitely. lemonis: all right. i'll see you guys tomorrow. andre: see you tomorrow. ♪ lemonis: good morning. it's clear to me that the products that erica has built have real value in the marketplace, and i have agreed to put $75,000 into the business, and we're gonna utilize the assets that exist to pay down debt. all this product here has to be sold on the internet. and once we've solved everything with the creditors, we're gonna rebuild the business. we want to look at all the recipes, and we want to narrow the product offering down to what's actually gonna sell. we're gonna work on branding. we're gonna work on packaging, how it's gonna be marketed. okay? employees: okay. all right. lemonis: let's go to work. erica: all right. ♪
lemonis: erica told me that she's sold her products at kroger, and so, in order for me to understand what the issues are, i wanted to go to kroger and actually see it on the shelf, see what it's competition is, and see where the real opportunity is. let's go to where the pancake aisle is. erica: okay. lemonis: so, chicken mixes, bisquick... erica: mm-hmm. lemonis: where is yours? erica: we're in the local set. lemonis: in the what? erica: in the local set. so, i'll show you. we're in an area called "local." it is all through georgia, krogers all throughout georgia. it should be on aisle 7. this is us. lemonis: yeah, but... this is "latin american foods." erica: the goal is to get over to the aisle with the national brands. lemonis: the only way you're gonna get to the placement you want in a retail store is to have national appeal. let's look at the products that you have today. i bought some. erica: okay. lemonis: part of the reason erica is in an oddball aisle
is that her products don't have a cohesive story to them. are you a breakfast company or are -- erica: i started at as a breakfast company. that was my initial vision when i started the company. lemonis: okay. i don't think you're a breakfast company if you have fried chicken mix. erica: no. lemonis: you're a southern-inspired foods company. erica: yeah. lemonis: can you buy off on that? erica: i can. lemonis: okay, great. i want to have 12 skews in the lineup. erica: okay. lemonis: something that actually can make a full set with a story behind it where whether you like breakfast, lunch, dinner, whatever it may be, there are southern-inspired recipes. erica: mm-hmm. lemonis: so, four pancakes... erica: yeah. lemonis: ...two grits... erica: yeah. lemonis: ...two fried chicken. erica: mm-hmm. lemonis: all this other stuff... is just noise. so, there's four skews missing. what four skews would you develop? erica: maybe one biscuit mix. one or two. lemonis: okay. erica: cornbread could go with chicken. lemonis: okay, what else? erica: cakes! lemonis: so, here is my challenge to you. erica: okay. lemonis: if you're as good of a chef as you say you are and you understand southern foods as good as you say you do, i want to see them developed, and i want to taste them.
erica: okay. lemonis: okay? erica: i can do it. ♪ lemonis: what's happening? andre: hey. lemonis: how are you, buddy? looking a little sharp today. erica. erica: yes? lemonis: i need you. so, we're gonna look in this trailer. we're gonna establish a value so we can see how we're gonna solve the debt. erica: okay. lemonis: okay? erica: makes sense. lemonis: let's look outside. what's troubling for me is that erica has blown $500,000 since she started this business. so, i wanted to take andre and her out to the storage shed so that we can start liquidating some of this merchandise and start the process of generating cash and paying down this debt. when's the last time you all were in here? erica: probably about a month ago. andre: i've never been in here. lemonis: that's good to know. andre: yeah. ♪ lemonis: are you [bleep] me?
how much does this trailer cost a month? erica: $89 a month. lemonis: uh-huh. so, that's more than $1,000 a year that could be paying off debt, right? erica: yeah. lemonis: what's this? erica: kitchen equipment. lemonis: how long's it been here? erica: for six months. lemonis: what's this? erica: packaging that we modified for a customer. lemonis: is that garbage? erica: there's computer routers and cameras from the old building. it's probably worth around 1,500 bucks. andre: probably not after it's used. maybe 400 bucks. lemonis: what is this? erica: cameras. these can be installed. lemonis: why hasn't it been done? erica: well, it was an idea that didn't work. andre: you got to be more frugal. i mean, you got to figure out a way to not blow all that money. lemonis: what the hell is this? erica: it's a bike. it's 500 bucks. andre: why did you waste 500 bucks on a bike? erica: it's a delivery vehicle. lemonis: what's that? erica: it goes to some kitchen equipment. lemonis: why is it out here? erica: it needs to be put together. lemonis: this looks like a brand-new printer. what's this thing worth? a couple $300? erica: yeah. andre: you got to be strategic
with your money. you're just blowing money. you're not thinking about long term. erica: i do respect money. at moments, i've lacked resources. i've been... spread thin, and i've made some bad decisions. andre: yeah, but i've given you a lot of money, and all this is a waste. we need to know we're not losing money every time you're spending. lemonis: andre, i have to be honest with you -- since i met you, you've been very critical of the business. andre: yeah, but it's almost as punishment for wasting money. lemonis: i think you resent her so much 'cause you don't think she looks at money the way you look at money, and i'm not gonna disagree with you. but the solution isn't to keep telling her how stupid she is and telling her, "i'm gonna punish you." erica: this is the way he talks to me. this is what i deal with. andre: i'm not saying "punish" -- lemonis: you said "punish"! andre: i mean, i would say as repercussion for -- lemonis: what a repercussion! she's not your child! honesty, that's [bleep] up. if your business is in trouble and you need my help,
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aww, you did the laundry! it's got to be tide. how stupid she is and telling her, "i'm gonna punish you." erica: it makes me sad at his perspective. lemonis: it's like sometimes people don't have the knowledge. she has talent. she's creative. she's charismatic. andre: uh-huh. lemonis: she's not good at money. she's saying, "i suck at it." so, if you have the ability, your responsibility is to coach her. there's no doubt that andre possesses more financial literacy, but what he doesn't possess is some of the creativity erica possesses. and i'm hoping that andre takes his financial literacy and her creativity, and they can work together so they can improve the business. we know that we have to solve for all the debt. erica: yeah. lemonis: so, that's really what i need you to think about. erica: yep. lemonis: i want to know what your ideas are to generate some cash from this. erica: i'll sell some of this stuff one ebay. i'll put some of it locally on craigslist. lemonis: and we'll come up with a methodology
for spending money where we say, "okay, it's this much. this is the purpose. this the return. yes or no?" 'cause i think if you can be taught that, then this won't happen. erica: absolutely. lemonis: deal? erica: all right. ♪ lemonis: we're gonna see how much traffic we can drive to the website to move all this stuff. we're gonna do it right now. erica: oh, wow. lemonis: we're laser-focused on liquidating assets to pay off erica's debts. i need you to be enthusiastic like you're selling to save your business. the first step is to get the word out, so we're creating a facebook live video. erica: we have an awesome deal. 25% off of all of these great products on our website. lemonis: we're playing to our strengths. we have a great product with tons of personality. who's the boss in the kitchen right now? erica: i -- i'm the boss! lamarinette: okay. i'ma let her have her way. she says she's the boss,
but we the boss. lemonis: we need to start ringing the till. i want to see orders when i come back on tuesday. erica: okay. lemonis: in addition, erica's working hard to turn the stuff from the storage container into cash. erica: shelving for a retail store. it's a full display. it was custom made. i'm looking to generate $3,000. we shipped out 200 earlier today, so we had four pallets. lemonis: okay, is there no more to ship out today? erica: absolutely. we have another 117. lemonis: it's only been a few days, and the orders are pouring in from the facebook live video. erica: we've sold about $12,000 worth of inventory online in about two days. lemonis: and she's working hard to negotiate and settle her past debts. erica: okay, would $25,000 work? man: would that be paid by the end of september? erica: yes, i can get it done by the end of september. man: i would love to do that for you, erica. lemonis: so far, she's negotiated over $150,000 off on her debt, and she's generated over $20,000 by selling merchandise.
erica: all right. awesome. lamarinette: what is this? lemonis: what do you mean, "what is this?" i asked them to pack a duffel bag, and that i was gonna take them somewhere. i think they thought we were just gonna drive around town. erica: marcus, is this your plane? lemonis: yeah. erica: this is your plane?! lemonis: yes. erica: holy [bleep] first of all, i've only seen this in music videos. lamarinette: where are you taking us to? lemonis: we're going to see a friend of mine. lamarinette: trust the process. give me five. let's roll. erica: let's roll, mama. [ laughter ] ♪ lemonis: i brought erica here today because she's been working on a new cornbread recipe, and i want to see her work in a collaborative environment. i know that she's proud of having done everything on her own, and that's fine, but i'm a big believer
that two heads are better than one. isn't this place beautiful? lamarinette: it is. art: hello! good afternoon. lemonis: hey, buddy. art: good to see you! lemonis: good seeing you. art: how are you? nice to meet you. art smith. lemonis: i wanted to introduce to erica to chef art smith. he's a famous chef from chicago who's cooked for oprah, the white house, and he specializes in southern foods. erica: this is beautiful! john: nice to meet, y'all. erica: erica. john: john. lemonis: so, why don't we start with the chicken. erica: what are you doing? lamarinette: oh, i'm rinsing the chicken right about now. erica: i don't rinse chicken. lemonis: why not? erica: i just don't. art: um... you're probably better off to rinse them. lamarinette: yeah, traditionally in the south, that's what we do. we take out -- erica: i've never done that. art: the rinsing of the chicken helps to stop cross contamination, and that's something that's widely known. erica: all right, so whatcha doing, mom?
since when did you become a chef? lamarinette: i don't need a coach when i'm frying chicken. art: in our restaurant, you know, we find it fries better at a lower temperature, but i think it's okay. lemonis: erica, i can tell you're annoyed right now. erica: i am annoyed. lemonis: why are you annoyed? erica: there's too many cooks in the kitchen. and i have my own way. i just love cooking in my own without people telling me how to do it, what to do. ♪ jim: i was a little thrown off by the packaging. plus, your titles are kind of small. i've heard from a lot of retailers that they love the packaging. so, they like it. i like it. let's keep it that way. ♪ ♪ ladies and gentlemen mini is a different kind of car. for a different kind of drive.
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lemonis: what is going on? erica: this isn't me. this is what i normally do, and i'm in control. lemonis: and that's why you're upset? erica: yeah, 'cause i'm not in control. and that's why it feels out of control. lemonis: well, let's you and i take a walk away from everybody. talk to me. erica: when i started this company, it was based on me sharing who i am to the world,
and i don't want to alter who i am. lemonis: at the end of the day, everybody knows you run the business and you make the business decisions. and what i'm asking you to consider is you should try to give up a little control. erica: yeah. lemonis: okay, let's get in there. i just want her to be more open to ideas, and for me, the only way she does that is by giving up control which could allow for better collaboration, new ideas, and taking what she already has and making it better. how are you, sir? i had a bit of a surprise for erica. i brought in a number of local chefs, farmers, distributors, people that know the southern culture. erica: our fried chicken mix is a way for people to make good traditional, southern fried chicken as simple as possible. lemonis: and i wanted to get their independent feedback about her products. erica: do you guys like it? man: that was unlike any other chicken i've had.
that was really good. man #2: for me, it was perfect. man #3: i can't find any problem with. just not enough of it. [ laughter ] erica: this is what we call fiesta cornbread. this is something that i love for my mom to make me. woman: phenomenal. i've never had cornbread spice that i actually like. lemonis: i'm just gonna tell you -- that cornbread is legit. man #4: it's authentic. lemonis: authentic. erica: i like that word. lemonis: thank you, everybody. erica: thank you so much. lemonis: in order for erica to grow her business, she's gonna have to find a partner that can help her scale up to really do volume in a way that's efficient with precision. so, i brought her to pelican bay. erica: there's a lot of stuff being packed here. how many square feet is the facility? bobby: 35,000. erica: how many employees do you guys have? bobby: about 135. lamarinette: wow! it's so much different than our process. bobby: this is our blending area.
lemonis: how much can you mix in a day? bobby: on a single shift -- 21,000 pounds. lemonis: 21,000 pounds? bobby: yep. lemonis: and what can you do in a day? erica: it would take us about two weeks to do what you guys are doing today. lemonis: okay. if this company's gonna make money, i need to sell 100 pallets, not 100 boxes. jim, how are you, buddy? jim: good. how are you doing? lemonis: these are my two partners. jim: oh, i'm a hugger. erica: awe, nice to meet you. lemonis: what pelican bay provides erica is more than just a refined co-packing facility. they have years and years of experience developing the packaging, and i think erica could use the help. i'm looking for you to give them constructive feedback. jim: okay. i was a little thrown off by the packaging vehicle 'cause it reminds me of ice cream. erica: well, i initially thought that the ice cream packaging was something that was gonna disrupt the retail shelf. it's fun. it speaks flavors. it says that we're different. jim: but i think that that's gonna look really small. it's not gonna be value-added. plus, your titles are kind of small, so i would blow up the flavor profile
and kind of get more of a sale that way. erica: i've heard from a lot of retailers that they love the packaging. so, i say, well, you know, they like it. i like it. let's keep it that way. lemonis: so, it's about you liking it? erica: and the retailer, as well. we've gotten compliments. lemonis: which ones? erica: we've gotten compliments from target. lemonis: and is it in target today? erica: no, it's not. lemonis: okay. jim: we work with target, and i can let you know that this didn't make it on there 'cause it didn't look big enough. this is 12 ounces, so it's 1 ounce more than yours, and if you have a pancake mix that's bigger, people are gonna tend to go towards that. lamarinette: if i was shopping, i would try it. lemonis: my only thing that i want to do is make sure southern culture has a consistent branding. we want to let them drive that process. erica: yeah. lemonis: i continue to be disappointed with erica's unwillingness to listen and collaborate. jim has almost 20 years of experience. he's not giving her his opinion. he's giving her the facts. and, jim, you have a team here that can help finish the packaging, work with the artwork. jim: make actual handmade mock-ups.
lemonis: jim, thank you. jim: thank you. ♪ lemonis: hey, erica, can you give me an update on the financials? it's time to tally up all of the money that erica has generated in the past few months. but more importantly, determine if we're gonna be able to be partners. how much inventory is left? erica: maybe a couple hundred dollars worth? lemonis: most of it sold? erica: most of it sold. i didn't realize, like, man, how could i not know that this much inventory was sitting in the warehouse, and we had this much money just sitting here? we're able to pay the shop if i loan that balance. lemonis: everything that i asked erica to do along the way, while it was challenging, she did it. get rid of some of the debt, negotiate with some of the creditors, sell off the inventory, get rid of some of the assets. every step along the way, she did exactly what i asked her to. i do want you to celebrate the fact that you went from $500,000 to $200,000. erica: thank you. lemonis: but how do we guarantee that it doesn't happen going forward with my money?
erica: i won't ever go through with this again. i kind of went haywire with these loans, just trying to keep it open. this will never happen again. lemonis: so, i feel like you've proven that you have learned your lesson, in my opinion. erica: mm-hmm. lemonis: and i'm willing to allow you to cash the $75,000 check. for the $75,000, i want to have 50.1% of the business. erica: wow. lemonis: you'll have 49.9% of the business. erica: i would feel comfortable with at least 55%. lemonis: i would feel more comfortable if i had 55%, too. erica: i've never had to answer to anybody.
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you'll have 49.9% of the business. erica: i would feel comfortable with at least 55%. lemonis: i would feel more comfortable if i had 55%, too. erica: i've never had to answer to anybody. maybe it's a control thing. lemonis: so, it's a "yes" or a "no"? deposit the check or you don't. erica: it's definitely a "yes." lemonis: okay. okay. now we're able to put actual dollars into growing our inventory, but in the mean time, erica has to put the finishing touches on all the recipes especially after the feedback from chef art. the new southern culture line features three pillars -- the breakfast lineup with pancakes, waffles, and grits, a spice blend lineup with our fried chicken mix, and a baked goods lineup including cornbreads and cakes. the three distinct lines present a cohesive lineup that's really going to appeal to buyers.
meanwhile, she's been working with jim at pelican bay to finalize all of the packaging. erica: just want to walk you through what we've been working on for all of the products. we wanted a place where people could be inspired. lemonis: the new designs look great. i had a chance to chat with the folks at pelican bay. how are you working with them? erica: they've been very helpful. and jim is great. we talked about what sells, what doesn't sell. i'm learning a lot. lemonis: i'm impressed that she was able to tap in to what pelican bay had to offer. that willingness to collaborate is exactly what's necessary for this business and her to go the next level. there's an innovative website for foodies -- mouth.com. erica: uh-huh. lemonis: they put all kinds of cutting-edge products out there. so, we're gonna go meet the buyers at mouth.com, but they have to get behind the product. okay, we're making progress. erica: awesome. yes, we are. this is awesome. lemonis: i'm headed back to southern culture to find out where erica's at because we're only one week away from our pitch with mouth.com.
erica: hey, marcus! lemonis: hi! what are you making? erica: i'm making biscuits. this is a salt and pepper biscuit. lemonis: that is pretty damn good. i'm very impressed with how much progress erica's been able to make in such a short period of time, but for me, there's still one bit of unfinished business. from my perspective, this business doesn't function without you. and so, making sure that you have some ownership in the business that makes you partners with erica and i, is what i think has to happen. lamarinette: ownership? lemonis: yes. lamarinette: me? lemonis: in your name. and so, i'm willing to lower my equity so that you can be a partner. i want you to have 17%. erica: you okay, mama? lamarinette: i'm so happy. i'm so happy. i don't know what to say. i'm probably not gonna sleep tonight. ♪
lemonis: good morning! all: good morning! lemonis: what's andre doing here? andre: well, i came out to support my wife and to help out with the process. erica: aren't you sweet! lemonis: in this particular case, whether andre likes the business or he doesn't like the business, what i really wanted him to do was show support for this wife, and that's what he did. all right, let's head in. i'm marcus. kate: marcus. kate harper. very nice to meet you. sam: sam. lemonis: i'm marcus. sam: sam murray. nice to meet you. lemonis: these are my partners. sam: well, first of all, welcome to brooklyn and welcome to mouth. we're excited to go through the whole thing. lemonis: mouth.com is a huge, food-subscription business, and i think if they like the product, well, it's a pretty good indication of what the whole marketplace is gonna think. erica: i'm erica, and this is... lamarinette: i'm mama. sam: mama? lamarinette: mama. erica: mother-and-daughter team. we're business partners, and our company is southern culture. we have three lines within our brand. sam: i have to say, from our perspective, we think southern food so long has become somewhat commercialized
and become somewhat of a joke in american cuisine. it's overly sweet or overly spicy. erica: you know, our ideals are similar to you all's because we believe in really reinventing southern food and really updating that and adding a new twist and making it fun again. lamarinette: and erica loves quality, and today, when you taste this food, one thing i know for sure, what's in the box we stand behind our name. sam: speaking of which, we'd love to try everything you've laid out in front of us. erica: i would love for y'all to just kind of dig in, and, you know, you can start wherever you like. so, the biscuit is a salt and cracked pepper biscuit. it's just a biscuit with some flavor. sam: it crumbles perfectly. just, like, to the right amount of texture. kate: it's a little spicy, for sure. i don't know that... it wouldn't be me for breakfast. i don't think i can handle that. lemonis: for exclusives, extras, and business advice,
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sam: i think that's a perfect transition to the fried chicken. erica: absolutely. ♪ sam: mmm. that's good amount of spice to it, also. you can taste the chicken. a lot of time spice overwhelms. lemonis: what would you like them to try next? erica: pancakes. we have some banana pudding pancakes. we found a way to really incorporate southern favorites and put it into breakfast. sam: i have to say, the banana pudding is the perfect amount of sweetness. you won't -- you almost don't need syrup. erica: and then cornbread. kate: i like the pieces of corn in there. it's nice to get the texture. well played. sam: yeah, it feels authentic, which is great. lamarinette: so, based on what you've seen and you've heard here today and you've tasted our products, would you be willing to move forward with our company? kate: i think there's definitely an opportunity to explore. we have an indie states of america, where every month we feature food from a different part of the country, and certainly the south is a popular item,
and you are representing so well. sam: it's very exciting. it's a privilege for us to meet you guys, and hopefully we can work together. thank you, guys kate: thanks for coming. erica: thank you for having us. sam: congratulations. erica: thank you so much. sam: it's really great to meet you guys. take care. talk soon. erica: now i'm dancing. lemonis: throughout this process, erica has done everything i've asked her to do. since being at mouth.com, she's gone back into kroger and gotten and expanded category on all their shelves. in addition to that, she's in the final discussions with walmart to get into a number of their stores. it wouldn't surprise me if this business did over a million dollars in the next 12 months. andre: how did it go? erica: so, they're interested in... lemonis: putting all the boxes on. erica: yeah. andre: i'm definitely proud. erica: well, that means a lot. lamarinette: you put a smile on my face. lemonis: you want to talk about progress? i give the credit to erica and mama. erica: that means a lot. lemonis: i'm gonna join you guys.
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